1

Ajinomoto Principle

on Corporate Governance

~Aiming for Sustainable Growth through Value Creation via ASV~

Ajinomoto Co., Inc.

June 28, 2019

2

Table of Contents

Chapter 1: Introduction

Chapter 2: Basic Approach

Chapter 3: Relationship with Shareholders and

Stakeholders 1. General Meeting of Shareholders

(1) Positioning of the General Meeting of

Shareholders

(2) Ajinomoto’s Initiatives

2. Dialogue with Shareholders and Investors

3. Capital Policy and Shareholder Return Policy

4. Cross-Shareholdings

(1) Holding Policy and Reviews

(2) Exercise of Voting Rights

(3) Cross-Holding Shareholders

5. Application of IFRS

6. Related Party Transactions

7. Disclosure of Information

(1) Disclosure of Financial Information

(2) Timely and Fair Disclosure

(3) Disclosure Method

Chapter 4: Board of Directors and Committees,

etc. 1. Board of Directors

(1) Role of the Board of Directors

(2) Composition and Diversity of the Board of

Directors

2. Nominating Advisory Committee

3. Compensation Advisory Committee

4. Corporate Governance Committee

5. Management Foundation Review Committee

6. Outside Director Communication Committee

7. Support System for Board of Directors and

Committees, etc.

8. Evaluation of Effectiveness of the Board of

Directors

Chapter 5: Directors 1. Selection and Dismissal of Directors

(1) Procedures for the Selection of Directors

(2) Capability Requirements for Director

Candidates, etc.

(3) Reelection and Dismissal of Directors

(4) Successor Plans

2. Compensation

(1) Basic Policy Regarding Director

Compensation

(2) Details of Director Compensation

(3) Policy Regarding the Determination of

Payment Ratio, etc., for Company

Performance-Linked Compensation and

Non-Company Performance-Linked

Compensation

(4) Procedures for Determination of Director

Compensation

3. Training

4. Independence Standards

Chapter 6: Audit & Supervisory Board

Members, Audit & Supervisory

Board, and Accounting Auditor 1. Audit & Supervisory Board Members and Audit

& Supervisory Board

(1) Role of the Audit & Supervisory Board

Members and Audit & Supervisory Board

(2) Composition of the Audit & Supervisory

Board Members and Audit & Supervisory

Board

(3) Procedures for the Selection of Audit &

Supervisory Board Members

(4) Audit & Supervisory Board Members’ Audit

(5) Operation of the Audit & Supervisory Board

(6) Audit & Supervisory Board Member Staff

2. Accounting Auditor

Chapter 7: Risk Management 1. Basic Approach

2. Internal Controls

3. Committees under the Executive Committee

Chapter 8: Compliance 1. Basic Approach

2. Internal Reporting System

Chapter 9: Diversity Promotion

※ The (CGC Rules X-Y) description of each item in this Principle indicates its correspondence with the Corporate

Governance Code laid out by the Tokyo Stock Exchange (June 2018 Edition).

3

Chapter 1: Introduction

The Ajinomoto Group has passed down the commitment of its founding to improve people’s nutrition through

umami seasonings that make simple foods taste better. We have achieved growth consistently since our founding

through initiatives that create both social and economic value through our businesses. We call these initiatives

Ajinomoto Group Shared Values (ASV), and going forward we will continue to strengthen corporate governance

in order to achieve sustainable growth through unique value creation through these ASV initiatives. This

Principle, which is the foundation of ASV's evolution, is intended to make it easy for stakeholders to understand

the ongoing efforts to strengthen the Ajinomoto Group's corporate governance, central to deepening dialogue

and collaboration, and published based on Board of Director's discussions.

Chapter 2: Basic Approach (CGC Rules 2-1, 2-2, 2-3 and 3-1)

The Ajinomoto Group positions corporate governance as one of the most important aspects of its management

foundation for accelerating its ASV efforts and achieving its vision of becoming a “Genuine Global Specialty

Company”. While continuously working to establish an effective corporate governance system that balances

“supervising appropriate execution to reflect stakeholders' opinions” and “flexible decision making and

execution,” the Ajinomoto Group sincerely maintains the “Ajinomoto Group Policy” (hereinafter referred to as

“AGP”), which shows the behavior and way of thinking that Ajinomoto Group companies, their officers, and

their employees should follow. The Ajinomoto Group believes that continuation to work on the establishment

of internal control systems and their appropriate operation and to deepen dialogue and collaboration with

stakeholders will lead to solve “issues that the society of 21st-century are facing” through our business, as well

as to become the foundation of ASV which continuously enhance corporate value.

Chapter 3: Relationship with Shareholders and Stakeholders

1. General Meeting of Shareholders (CGC Rules 1-1 and 1-2)

(1) Positioning of the General Meeting of Shareholders

The General Meeting of Shareholders, as the highest decision making body of Ajinomoto Co., Inc.

(hereinafter referred to as “Ajinomoto”), is responsible for decision making with matters that materially

affect the interests of shareholders, such as the distribution of surplus as stipulated by laws and in the

Articles of Association, the selection and dismissal of Directors and Audit & Supervisory Board members,

and the changes in the Articles of Incorporation and reorganizations, etc. Ajinomoto has positioned the

General Meeting of Shareholders as an opportunity for Directors to constructively interact with

shareholders and strives to ensure sufficient time for necessary dialogue while giving easy-to-understand

explanations to shareholders.

(2) Ajinomoto’s Initiatives

At the General Meeting of Shareholders, Ajinomoto makes the following efforts so that shareholders can

appropriately exercise their voting rights and other rights.

4

1) The date of the General Meeting of Shareholders is decided with consideration to avoid dates when

many other companies hold their General Meeting of Shareholders, ensuring the necessary time for

closing operations and for auditing, and securing a venue where a large number of shareholders can

attend.

2) The Convocation Notice of the Ordinary General Meeting of Shareholders is dispatched three weeks

prior to the date of the Meeting and is disclosed on Ajinomoto's website prior to dispatch.

3) An opportunity to exercise voting rights via the Internet is provided to shareholders so as to improve

the environment for shareholders to exercise their voting rights.

4) Ajinomoto participates in the electronic voting platform to improve the environment for institutional

investors to exercise their voting rights.

5) An English summary of the Convocation Notice of the Ordinary General Meeting of Shareholders is

available on Ajinomoto's website.

2. Dialogue with Shareholders and Investors (CGC Rules 5-1)

Ajinomoto developed the following procedures in order to promote constructive dialogue with shareholders

and investors.

1) The executive officer in charge of IR has responsibility for overall dialogue with shareholders, assisted

by the general managers of the Corporate Planning Dept., Public Communications Dept., Legal Dept.,

and Finance & Accounting Dept., as well as the head of the IR Group in the Global Finance Dept.

2) Persons in charge of Corporate Planning Dept., Public Communications Dept., and IR hold an

information liaison meeting monthly for sharing future plans and the status of preparations of

presentations, so that to ensure that matters requiring public disclosure are announced appropriately

without delay. .

3) As well as holding financial results briefings, medium-term management plan briefings, business

briefings, ESG briefings, and other briefings, facility tours for individual shareholders and IR seminars

for individual investors are held in order to deepen their understanding of the Ajinomoto Group.

4) The IR Group of the Global Finance Dept. holds dialogues not only with shareholders but also with

institutional investors. The opinions and concerns of shareholders and institutional investors obtained

throughout the dialogues are shared with top management and with persons in charge of Corporate

Planning Dept. and Public Communications Dept. as monthly report by the IR Group.

5) Training is held for persons in charge of dialogue with shareholders and investors with regard to the

management of insider information. Additionally, in cases where executive officers and employees

are involved with projects that correspond to important undisclosed information, the relevant

executive officers and employees are asked in advance to submit a confidentiality agreement for each

applicable case.

3. Capital Policy and Shareholder Return Policy (CGC Rules 1-3 and 5-2)

The Ajinomoto Group promotes a capital policy that allocates generated cash flow to growth investment

and the expansion of shareholder returns while working to improve ROE and maximize operating cash

flow for sustainable improvement of shareholder value through ASV.

5

In addition, interest-bearing debt is provisioned on the basis of managing the net D/E ratio at an appropriate

level and aiming for an optimal capital/liability structure that takes into account capital efficiency and

capital costs.

4. Cross-Shareholdings (CGC Rules 1-4)

(1) Holding Policy and Reviews

Ajinomoto Co., Inc. decrease its holdings of cross-shareholdings gradually to the minimum amount

necessary. We carefully scrutinize each individual cross-shareholding in terms of whether the purpose of

holding them is appropriate and whether the benefits and risks of holding them are commensurate with the

capital costs. Every year, we review the propriety of holding shares through the Board of Directors and

disclose the results of these reviews. Additionally, those shares judged as inappropriate to hold will be sold

once the detailed plan for selling is determined.

(2) Exercise of Voting Rights

Ajinomoto exercise the voting rights of cross-shareholdings so as to contribute to improving long-term

corporate value. Ajinomoto vote against instances where shareholder value is significantly impaired due to

organizational restructuring or other factors, or cases where serious concerns arise with regard to corporate

governance for reasons like social scandals.

(3) Cross-Holding Shareholders

Ajinomoto do not imply a reduction in transactions and do not prevent sales, etc., if a company holding

Ajinomoto's shares as a cross-shareholding expresses an intention to sell its shares, etc.

5. Application of IFRS

Ajinomoto uses IFRS (International Financial Reporting Standards) as its financial reporting standard but

defines AGAP-I (Ajinomoto Group Accounting Policy with IFRS base) and applies it to the entire

Ajinomoto Group, and at the same time works to improve the efficiency of business operations and

governance by establishing the "Group Shared Policy on Accounting" as the policy regarding accounting.

6. Related Party Transactions (CGC Rules 1-7)

When a Company Director who serves concurrently as the president, etc., of another company or

organization, etc., (excluding wholly-owned subsidiaries) is the counterparty in a transaction with

Ajinomoto and other similar instances, the transaction with regard to competition or conflict of interest

involving the Director shall be approved by the Board of Directors by presenting the details of such

transactions.

Additionally, Ajinomoto carries out transaction with major shareholders in accordance with "Fair and

Transparent Transactions" and the "Group Shared Policy on Procurement" as defined in the AGP.

7. Disclosure of Information (CGC Rules 3-1)

(1) Disclosure of Financial Information

6

Ajinomoto discloses financial information such as financial status and business performance, management

strategies and management issues, and non-financial information such as ESG and risk management

information in accordance with laws and regulations. Furthermore, we proactively provide information so

that all stakeholders, including shareholders and investors can understand the path towards increased

corporate value through ASV with the aim of becoming a “Genuine Global Specialty Company”.

(2) Prompt and Fair Disclosure

Ajinomoto discloses information in a prompt and fair manner, in accordance with the Financial Instruments

and Exchange Law, other laws and regulations, and the rules for timely disclosure stipulated by the

Financial Instruments Exchange which lists our securities. In addition, based on Ajinomoto's timely

disclosure rules, Ajinomoto also deems information that may affect the investment decisions of investors,

even if such information is not applicable to timely disclosure rules, as important company information,

and Ajinomoto will makes efforts to disclose this information in a timely and fair manner.

(3) Disclosure Method

Ajinomoto discloses important Company information in timely disclosure information transmission

systems (TDnet), etc., provided by the Tokyo Stock Exchange, etc., and in press releases, and ensures that

such information is communicated to shareholders and investors via Ajinomoto's website and email

distribution.

Chapter 4: Board of Directors and Committees, etc.

1. Board of Directors

(1) Role of the Board of Directors (CGC Rules 4-1 and 4-5)

Ajinomoto's Board of Directors oversees the business execution of Directors and executive officers, etc.,

and makes important business execution decisions as management's highest decision-making body.

Additionally, through the corporate activities of the Ajinomoto Group centered on ASV, Ajinomoto works

with stakeholders and others to resolve social issues, contributes to the realization of a sustainable society,

and takes responsibility for sustainable enhancement of corporate value.

(2) Composition and Diversity of the Board of Directors (CGC Rules 4-6, 4-7, 4-8 and 4-11)

Ajinomoto has the basic policy for the Board of Directors composed of internal Directors in charge of

business execution, including the CEO, internal Directors who supervise business execution based on their

deep understanding of Ajinomoto's business without being in charge of business execution (hereinafter

referred to as "Non-Executive Internal Director"), and multiple independent outside Directors who can

objectively supervise business execution from an independent standpoint, taking into account the

Competence Requirements, etc. centered on "Ability to achieve ASV," and considers numbers, ratio of

internal and external individuals, ratio of executives and non-executives, and the diversity of individual

experiences, abilities, insights, internationalities, gender, and so on.

In addition, non-executive Directors account for a majority of the Board of Directors and independent

outside Directors account for one-third or more of the Board of Directors so as to promote the separation

7

of supervision and execution, and so as to enhance the effectiveness of supervision by the Board of

Directors.

The Chair of the Board of Directors is the Chairman of the Board of Directors (Torishimariyaku-Kaicho)

who is Non-Executive Internal Director.

2. Nominating Advisory Committee (CGC Rules 4-10)

Ajinomoto established a Nominating Advisory Committee as a voluntary committee of the Board of

Directors so as to fairly and appropriately carry out nominations for Director candidates, select and dismiss

the Chairman of the Board of Directors and the President, and select and dismiss the Representative

Director.

The Committee consists of four to seven members who are appointed from among the Directors by

resolution of the Board of Directors.

The majority of the members of the Committee are outside Directors and the Chair is also selected from

amongst the outside Directors. The Committee Chair promptly reports to the Board of Directors on the

contents and results of the Committee’s deliberations.

3. Compensation Advisory Committee (CGC Rules 4-10)

Ajinomoto established a Compensation Advisory Committee as a voluntary committee of the Board of

Directors so as to fairly and appropriately determine the compensation of Directors, corporate executive

officers, and corporate fellows, etc.

The Committee consists of four to seven members who are appointed from among the Directors by

resolution of the Board of Directors.

The majority of the members of the Committee are outside Directors and the Chair is also selected from

amongst the outside Directors. The Committee Chair promptly reports to the Board of Directors on the

contents and results of the Committee’s deliberations.

4. Corporate Governance Committee

Ajinomoto established a Corporate Governance Committee as a voluntary committee of the Board of

Directors so as to maintain and improve the soundness of management and corporate governance.

The Committee consists of four to seven members who are appointed from among the Directors or Audit

& Supervisory Board members by resolution of the Board of Directors.

The majority of the members of the Committee are outside Directors or Audit & Supervisory Board

members and the Chair is also selected from amongst the outside Directors or Audit & Supervisory Board

members. The Committee Chair promptly reports to the Board of Directors on the contents and results of

the Committee’s deliberations.

5. Management Foundation Review Committee

Ajinomoto established a Management Foundation Review Committee as a subordinate body of the Board

of Directors so as to establish a strategic direction for Group management and strengthen the foundation of

the cross-Group management function.

8

The Committee consists of three Representative Directors, including the President, and one Non-Executive

Internal Director, and the Chair is the President. The Committee Chair reports to the Board of Directors on

the contents of their examination.

6. Outside Director Communication Committee and Lead Independent Outside Director

Ajinomoto established an Outside Director Communication Committee with the aim of improving the

quality of supervision of business execution through the exchange of information between the outside

Directors and the outside Audit & Supervisory Board members and through the mutual complementation

of specializations.

In addition, a lead independent outside Director is mutually selected by the independent outside Directors

so as to respond to stakeholders and provide effective advice to executive Directors.

7. Support System for Board of Directors and Committees, etc. (CGC Rules 4-13)

In order to ensure the efficient and effective management of the Board of Directors and various committees,

the Secretariats consisting of the Corporate Planning Dept., Legal Dept., Secretarial Dept., and Human

Resources Dept., etc., supports surveys, preparation of materials, and schedule coordination. In addition,

the Secretariats cooperate with each other so as to promote timely and appropriate information sharing.

8. Evaluation of Effectiveness of the Board of Directors (CGC Rules 4-11)

Ajinomoto aims for the Board of Directors capable of appropriate and flexible decision making and

supervision of business execution, and analysis and evaluation of the effectiveness of the Board of Directors

based on the results of self-evaluation surveys from all Directors and all Audit & Supervisory Board

members, analysis by external lawyers, and verification of results at the Board of Directors.

In addition, based on the results of the effectiveness evaluations, the Board of Directors discusses,

formulates and implements measures to improve issues that were discovered. Through these efforts,

Ajinomoto strives to improve the effectiveness of the Board of Directors and further strengthen corporate

governance.

Chapter 5: Directors

1. Selection and Dismissal of Directors (CGC Rules 3-1 and 4-3)

(1) Procedures for the Selection of Directors

Ajinomoto's Directors are nominated by the Board of Directors based on the recommendations of the

Nominating Advisory Committee and are selected by a resolution of the General Meeting of Shareholders.

The selection of the Chairman of the Board of Directors, President, and Representative Director is made

by a resolution of the Board of Directors, based on the recommendations of the Nominating Advisory

Committee.

(2) Competence Requirements for Director and Top Management Candidates

For selection of Directors and top management candidates, including Chief Executive Officer, the

following competence requirements, etc., (hereinafter referred to as "Competence Requirements centered

9

on ‘Ability to achieve ASV’") are determined by the Board of Directors, based on discussions of the

Nominating Advisory Committee.

① Ability to achieve ASV

② Ability to achieve global top 10 class company

③ Ability to create markets

④ Ability to achieve sustainable growth

(3) Reelection and Dismissal of Directors

In reelecting Directors, the Nominating Advisory Committee conducts substantial discussions reflecting

performance evaluation, etc., in addition to the Competence Requirements centered on "Ability to achieve

ASV."

In addition, when considering resolutions for dismissal of Directors and the dismissal of top management

positions, the Board of Directors makes a comprehensive decision based on the deliberations of the

Nominating Advisory Committee or an investigation by a Third-Party Committee, etc., if necessary.

(4) Succession Plan (CGC Rules 4-1)

Based on the request from the Board of Director's, the Nominating Advisory Committee reports to the

Board of Directors about candidates for future Chief Executive Officer, develops a successor plan, and

confirms and advises on its operation.

2. Compensation (CGC Rules 3-1 and 4-2)

(1) Basic Policy Regarding Director Compensation

The basic policy on compensation for Ajinomoto's Directors is as follows.

1) It leads to medium and long-term expansion of corporate value in line with AGP

2) The compensation level is sufficiently competitive compared to the market level.3) Decisions are made

through a transparent process and their content can be described to stakeholders

(2) Details of Director Compensation

1) Content of Director compensation, excluding outside Directors

The compensation of Directors, excluding outside Directors, comprises monthly compensation, short-

term company performance-linked compensation, and medium-term company performance-linked

stock compensation, as described below.

(a) Monthly compensation

Monthly compensation is paid in cash as a basic compensation in line with job responsibilities and

to sufficiently demonstrate the qualities and capabilities to drive corporate growth, and the amount

of compensation for each position is set in reference to the results of a survey by an external

organization.

(b) Short-term company performance-linked compensation

Short-term company performance-linked compensation is monetary compensation that is paid

according to company-wide and divisional performance evaluations at the end of the fiscal year as

10

an incentive to encourage steady achievement of single-year performance goals and appropriate

management.

Company-wide performance uses sales amount, business profit, profit attributable to owners of the

parent company and ROE (both on a consolidated basis) as evaluation criteria. Departmental

performance uses the performance of the department, organization, and corporation overseen by that

Director as evaluation criteria.

(c) Medium-term company performance-linked stock compensation

Medium-term company performance-linked stock compensation, with the goals of increasing

corporate value and sustainably improving the Ajinomoto Group's performance across the medium

and long-term, uses business profit and ROA (both on a consolidated basis) in the final fiscal year of

the Medium-Term Management Plan as evaluation criteria.

2) Details of Outside Director Compensation

Compensation for outside Directors is only monthly compensation and the amount of compensation is

decided individually by the Board of Directors based on the recommendations of the Compensation

Advisory Committee.

(3) Policy Regarding the Determination of Payment Ratio, etc., for Company Performance-Linked

Compensation and Non-Company Performance-Linked Compensation

1) Compensation Level Policy

The compensation level and ratio of total compensation amount for Directors, excluding outside

Directors, is based on the 75th percentile (the top 25%) of the compensation level for executives at

major Japanese companies, based on the survey results of external organizations.

2) Payment Ratio for Company Performance-Linked Compensation and Non-Company Performance-

Linked Compensation, etc.

The payment ratio of monthly compensation, short-term company performance-linked compensation,

and medium-term company performance-linked stock compensation is approximately 50:36:14

(annualized) when the performance target standards are achieved, but will change as follows depending

on performance. The higher the position, the greater the amount of compensation depending on

performance.

(a) The payment ratio of short-term company performance-linked compensation as a percentage of the

total compensation amount varies between a minimum of approx. 0% to a maximum of approx. 50%

in fiscal years which do not have medium-term company performance-linked stock compensation.

(b) The payment ratio of short-term company performance-linked compensation and medium-term

company performance-linked stock compensation as a percentage of the total compensation amount

varies between a minimum of approx. 0% to a maximum of approx. 70% in fiscal years which have

medium-term company performance-linked stock compensation.

(4) Procedures for Determination of Director Compensation

Upon receiving the recommendations of the Compensation Advisory Committee on policy, compensation

amount, standards, the enactment or revision of internal compensation rules, and performance evaluations,

11

etc., regarding Director compensation, Ajinomoto's Board of Directors determines the amount of

compensation for each Director.

3. Training (CGC Rules 4-14)

Ajinomoto provides the necessary support for self-improvement by internal Directors. In addition to

inviting outside experts every year to exchange opinions, mandatory executive officer training is held for

all Directors and Corporate Executive Officers, management themes are presented and management

problems are shared, and solutions are addressed.

Each department of Ajinomoto explains the details, etc., of its business and duties and provides an

opportunity to inspect its main business sites so that outside Directors gain a better understanding of the

Ajinomoto Group.

4. Independence Standards (CGC Rules 4-9)

Ajinomoto Co., Inc.’s outside Directors or Audit & Supervisory Board members (external) must not fall

under any of the following categories in order to be considered independent.

1) An individual or executive officer that undertakes major transactions with Ajinomoto Co., Inc.

2) A main business partner of Ajinomoto Co, Inc. or its executive officer

3) A consultant, accounting professional, or legal professional who receives large sums of monetary or

other compensation from Ajinomoto Co., Ltd. in addition to the compensation received as an officer

(if the entity receiving the said compensation is a corporation, association, or other organization, an

individual that belongs to said organization)

4) An individual who corresponded to any of 1) through 3) in the past year

5) A family member within the second degree of an individual who corresponds to any of (a) through (b)

below (excluding non-important individuals)

(a) An individual who corresponds to 1) through 4) above

(b) An executive officer of a subsidiary of Ajinomoto Co., Inc. (including non-executive Directors in

cases where an Audit & Supervisory Board member (external) is designated as an independent

Director)

(c) An individual who corresponded to (b) or was a corporate executive officer of Ajinomoto Co., Inc.

during the past year (including non-executive Directors in cases where an Audit & Supervisory

Board member (external) is designated as an independent Director)

(Notes) 1. “An individual that undertakes major transactions with Ajinomoto Co., Inc.” is defined

as someone who received payments from Ajinomoto Co., Ltd. during the most recent fiscal year

that was either 2% of the individual’s total annual consolidated net sales or 100 million yen,

whichever is higher.

2. “A main business partner of Ajinomoto Co., Inc.” is defined as someone who made payments to

Ajinomoto Co., Ltd. during the most recent fiscal year that was either 2% of the total annual

consolidated net sales of Ajinomoto Co., Inc. or 100 million yen, whichever is higher.

3. “Receives large sums of monetary or other compensation from Ajinomoto Co., Ltd. in addition

to the compensation received as an officer” refers to receiving from Ajinomoto Co., Inc. an

12

amount or other compensation that was either 2% of the individual’s net sales or gross income,

excluding compensation as an officer, or 10 million yen, whichever is higher, during the most

recent fiscal year.

Chapter 6: Audit & Supervisory Board Members, Audit & Supervisory Board, and Accounting Auditor

1. Audit & Supervisory Board Members and Audit & Supervisory Board (CGC Rules 4-4)

(1) Role of the Audit & Supervisory Board Members and Audit & Supervisory Board

Ajinomoto's Audit & Supervisory Board members and Audit & Supervisory Board recognize the trustee

responsibility to the shareholders and conduct business and accounting audits, including audits of Director's

performance of duties from an independent and objective position, for the shared benefit of Ajinomoto and

the shareholders as well.

(2) Composition of the Audit & Supervisory Board Members and Audit & Supervisory Board

In accordance with the Articles of Association, Ajinomoto's number of Audit & Supervisory Board

Members and Audit & Supervisory Boards, including people with considerable financial and accounting

knowledge, do not exceed five.

(3) Procedures for the Selection of Audit & Supervisory Board Members

The selection of the Audit & Supervisory Board member candidates is carried out by the Audit &

Supervisory Board under a basic policy to ensure the sound and sustained growth of the Ajinomoto Group

and to establish a high-quality corporate governance system that can stand up to the trust placed in

Ajinomoto by society. Shareholder meeting proposals for the selection of the Audit & Supervisory Board

members are submitted at the request of the Audit & Supervisory Board.

At least one of the Audit & Supervisory Board member candidates must be an individual with considerable

knowledge of finance and accounting, and three candidates for Audit & Supervisory Board members

(external) are selected, while each must possess advanced expertise in laws or accounting or have advanced

knowledge of corporate management.

(4) Audit & Supervisory Board Members’ Audit

Ajinomoto's Audit & Supervisory Board Members carry out audits of each Company department in order

to fulfill their roles and responsibilities, deepening their awareness of management problems from the

standpoint of general management, communicating regularly with and collecting information from

Directors and senior management, and working closely with the Internal Audit Dept. and accounting auditor.

Additionally, target companies are selected from the Group's domestic and international companies based

on their importance and risk approach. Furthermore, Audit & Supervisory Board members conduct audits

of the management of Group companies through collaboration with the auditors of Group companies and

the Group's Standing Audit & Supervisory Board, composed of standing corporate auditors from domestic

Group companies.

(5) Operation of the Audit & Supervisory Board

13

Ajinomoto's Audit & Supervisory Board, as stipulated in laws, regulations, the Articles of Association, and

the Audit & Supervisory Board regulations, discusses and decides important matters related to audits such

as audit policy, audit plans, division of duties, preparation of the Audit & Supervisory Board's audit reports,

etc., and as necessary receives reports from each Audit & Supervisory Board member, Directors, and

employees. In addition, in order to properly carry out their duties, the Audit & Supervisory Board fosters

communication with Directors and senior management to collect information and to create an environment

for auditing.

(6) Audit & Supervisory Board Member Staff

Ajinomoto's Audit & Supervisory Board established the Audit & Supervisory Office as an organization that

assists the Audit & Supervisory Board members in their duties and assigns full-time staff with appropriate

knowledge and skills to enhance their effectiveness. With regards to personnel evaluations, transfers, and

disciplinary actions, etc., for the staff concerned, the consent of the Audit & Supervisory Board members

is obtained, independence from the Directors is heightened, and the effectiveness of the Audit &

Supervisory Board members' instructions is ensured.

2. Accounting Auditor (CGC Rules 3-2)

Ajinomoto's Audit & Supervisory Board appropriately evaluates the accounting auditor by using the

independence and expertise of the accounting auditor and the appropriateness and relevance of the

accounting auditor's audit activity as evaluation criteria and based on reports from management and

executive departments, communication with the accounting auditor and listening to audit plans and audit

result reports and appropriately selects accounting auditor candidates.

The audit work by the accounting auditor is carried out by an executive employee who is a certified public

accountant and other assistants.

Ajinomoto recognizes that the accounting auditor has an important role in ensuring the credibility and

transparency of Ajinomoto's management for shareholders by conducting audits of financial statements,

etc., and works together with the accounting auditor to ensure proper audits.

Chapter 7: Risk Management (CGC Rules 4-3)

1. Basic Approach

Ajinomoto defines risk management as selecting and extracting "Corporate management-level risks and

opportunities," evaluating the degree of impact, and responding. The Committees described in section 3

are established under the Executive Committee and works on strengthening internal controls and risk

management.

"Corporate management-level risks and opportunities" are factors that may affect the Ajinomoto Group's

business activities, business strategies, products, assets, and credit, including those judged to have a

significant impact on the Ajinomoto Group even if it relates to individuals such as executives and

employees, that may seriously damage the lives and bodies of executives and employees, or that may have

an impact on corporate value of the Ajinomoto Group. Among those factors that have not yet emerged, but

14

which management should take the initiative to address, are climate change, social issues, and technological

innovation.

2. Internal Controls

Ajinomoto regards internal controls as an important task of corporate management, the Board of Directors

passed the "Ajinomoto Principle on Internal Control Systems," and Ajinomoto is striving to develop and

enhance internal control systems. The operational status of internal control systems and their effectiveness

are verified each year by the Internal Controls Effectiveness Verification Committee and the results of the

verification are reported to the Board of Directors.

3. Committees under the Executive Committee

Ajinomoto establishes the following Committees under the Executive Committee.

1) Business Conduct Committee

The Business Conduct Committee works to make the AGP known to all and checks to make sure that

management and corporate activities are carried out in compliance with these principles. It also carries

out measures that address issues. In addition, it also organizes manuals, has business management

organizations draft business continuity plans, and determines and inspects their state of readiness via

crisis management drills and the like in order to handle risks outside those at the corporate management-

level and actualized crises.

2) Management Risk Committee

The Management Risk Committee selects and extracts corporate management-level risks and

opportunities from among the various risks and opportunities facing the Ajinomoto Group as our global

expansion accelerates and formulates response measures for them.

3) Investment, Loan, and Business Scrutiny Committee

The Investment, Loan, and Business Scrutiny Committee carries out multifaceted reviews of investment

and loan decisions, revitalization of unprofitable businesses, and exits from unprofitable businesses,

prior to deliberations by the Executive Committee.

4) M&A Committee

The M&A Committee carries out multifaceted reviews of M&A deals prior to deliberations by the

Executive Committee.

Chapter 8: Compliance (CGC Rules 4-3)

1. Basic Approach

The Ajinomoto Group believes that compliance is complying with laws and AGP, as well as meeting the

social demands behind laws and AGP, and the Business Conduct Committee was established to foster an

open corporate culture and raise compliance awareness. The Committee, each time it holds its quarterly

Committee meeting, reports the contents of its deliberations and the status of its activities to the Executive

Committee.

2. Whistle-blowing System (CGC Rules 2-5)

15

The Ajinomoto Group stipulates the "Group Shared Policy on Whistle-blowing" for the purpose of ensuring

compliance management, maintains a system for internal reporting in order to prevent misconduct before

it happens and facilitate early detection and correction, and established an internal/external hotline as an

internal reporting desk. The manager of the General Affairs & Risk Management Dept. instructs relevant

parties to investigate the facts of internal reports and consultations that are received, formulates

countermeasures such as corrective steps, carries out these measures after deliberation with the Business

Conduct Committee as necessary, and reports the results to the Business Conduct Committee.

Chapter 9: Diversity Promotion (CGC Rules 2-4)

The Ajinomoto Group strives to improve diversity by respecting the diversity of attributes and values of

human resources so that every person working in the world can grow and be active regardless of race,

nationality, gender, culture, or customs, etc. The Group appoints a Director in charge of diversity and human

resources. Additionally, as part of diversity promotion, the Group carries out awareness training to create a

more comfortable working environment.

End of Document.